Report details special terms for U.S. military aid to Israel

Friday, October 15, 2004

Israel has been deemed the largest recipient of U.S. military aid and a beneficiary of terms denied most other U.S. allies.

A recent report by the Congressional Research Service listed details of U.S. military and security aid to Israel as well as what the study termed the unique aspects of Washington's assistance.

The report, entitled "Israel: U.S. Foreign Assistance," asserted that U.S. military aid has been used to finance military purchases in Israel as well as research and development in the United States, Middle East Newsline reported.

"U.S. aid to Israel has some unique aspects, such as loans with repayment waived, or a pledge to provide Israel with economic assistance equal to the amount Israel owes the United States for previous loans," Clyde Mark author of the report, wrote. "Israel also receives special benefits that may not be available to other countries, such as the use of U.S. military assistance for research and development in the United States, the use of U.S. military assistance for military purchases in Israel, or receiving all its assistance in the first 30 days of the fiscal year rather than in three or four installments as other countries do."

The report, released in July 2004, listed a series of Israeli-U.S. projects as well as U.S. aid to Israeli military programs. CRS said the United States has given Israel $625 million to develop and deploy the Arrow-2 missile defense system as well as $1.3 billion to develop the Lavi aircraft, cancelled in 1987.

CRS said the United States allocated $200 million for Israel to develop the Merkava main battle tank, the backbone of the nation's armored fleet.

The report said Israel received $107 million in 1977 to develop the Merkava tank. Another $130 million in U.S. aid was used to develop the Israeli-U.S. Theater High-Energy Laser, or THEL, program.

The report said Israel has also been allowed to employ U.S. military aid for offsets meant to benefit Israel's defense industry. CRS termed this practice unusual because Foreign Military Financing program was intended to sell U.S. goods and services.

"Other countries primarily deal with DOD [Department of Defense] for purchases from U.S. companies for U.S. military items, but Israel deals directly with U.S. companies for 99 percent of its military purchases in the United States," the report said. "Other countries have a $100,000 minimum purchase amount per contract, but Israel is allowed to purchase military items for less than $100,000."

The report said the U.S. government, in an unusual arrangement, does not disburse military funds to U.S. defense contractors for Israeli purchases. Instead, the Israeli Purchasing Mission in New York pays the American companies and is later reimbursed by the U.S. Treasury.

Copyright 2004 East West Services, Inc.

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